how to calculate inventory conversion period
2007-12-28 11:04:50 · 4 answers · asked by Help please 1 in Business & Finance ➔ Other - Business & Finance
Inventory Turnover = Cost of Goods Sold/Average Inventory
Explanation of Inventory Turnover:
The Inventory Turnover measures the how well the company can manage to sell its inventory. Another way of saying this is how efficiently the company converts inventory into sales.
Importance of Inventory Turnover:
If the company can quickly sell its inventory, then the Inventory Turnover will be higher. Conversely, if the company cannot sell its inventory very well, then the Inventory Turnover will be low. You will have to watch this figure closely - if the Inventory Ratio climbs too high, then the company may be keeping too little inventory. This could cause lost profits due to customer orders that had to wait until inventory arrived
2007-12-29 00:21:06 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
Inventory Conversion Period
2016-11-07 04:34:28 · answer #2 · answered by ? 4 · 0⤊ 0⤋
So you would have to know how much inventory you have now and how fast you are selling it, So subtract now from how much you sell over what period of time till its gone. So 100 pieces sold at 33/1/3 pieces a day over three days = 100 pieces so your inventory conversion is 3 days
2007-12-28 11:16:05 · answer #3 · answered by Nancy 3 · 0⤊ 0⤋
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how to calculate inventory conversion period?
how to calculate inventory conversion period
2015-08-15 08:36:20 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Jessica, are we doing our homework again?
2016-03-14 20:51:00 · answer #5 · answered by Anonymous · 0⤊ 0⤋